Government Outsourcing: Public Contracting with Private Monopoly

Emmanuelle Auriol and Pierre Picard

No 1733, CESifo Working Paper Series from CESifo

Abstract: The paper studies the impact of government budget constraint in a pure adverse selection problem of monopoly regulation. The government maximizes total surplus but incurs some cost of public funds. An alternative to regulation is proposed in which firms are free to enter the market and to choose their price and output levels. However the government can contract ex-post with the private firms. This ex-post contracting set-up allows more flexibility than traditional regulation where government commits to both investment and operation cash-flows. This is especially relevant in case of high technological uncertainties.

Keywords: privatization; soft-budget constraint; adverse selection; regulation; natural monopoly (search for similar items in EconPapers)
JEL-codes: D82 L33 L43 L51 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-com, nep-cse and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1733.pdf (application/pdf)

Related works:
Journal Article: Government Outsourcing: Public Contracting with Private Monopoly (2009)
Journal Article: Government Outsourcing: Public Contracting with Private Monopoly (2009)
Working Paper: Government outsourcing: public contracting with private monopoly (2009)
Working Paper: Government Outsourcing: Public Contracting with Private Monopoly (2008)
Working Paper: Government Outsourcing: Public Contracting with Private Monopoly (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1733

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().